Consistent with Race Tires, however, the Johnson court did allow taxation of costs for creation of TIFF images, as this item was "compensable as copies" under the statute. Other courts have also followed Race Tires in this regard. (See, e.g., Rawal v. United Air Lines, 2012 U.S. Dist. LEXIS 21880 (N.D. Ill., Feb. 22, 2012); Cordance v. Amazon.com, 2012 U.S. Dist. LEXIS 51268 (D. Del., Apr. 11, 2012).) Interestingly, however, §1920(4)'s qualification that the "copies are necessarily obtained for use in the case" appears to have derailed at least one party's attempt to recoup such conversion related fees. In Eolas Technologies v. Regents of the University of California, 2012 U.S. Dist. LEXIS 134114 (E.D. Tex., Jul. 19, 2012), the court ruled that conversion of native files to TIFF format, while allowable and desirable to avoid disclosing metadata, was not necessary to allow for production and, therefore, not taxable under §1920(4).
Thus, absent a more expansive reading of §1920 than afforded by Race Tires and other courts that have followed its precedent, a prevailing party may find its ability to recover its e-discovery costs limited, at least until the U.S. Supreme Court addresses the split in the circuits. Some have speculated, however, that the high court's recent decision in Taniguchi v. Kan Pacific Saipan Ltd., __ US __, 132 S.Ct. 1997 (May. 21, 2012), makes further consideration of the scope of §1920 unlikely in the near term.
In Taniguchi, the Supreme Court addressed the issue of whether the cost of translating documents falls within the ambit of "compensation of interpreters" pursuant to §1920(6). The Supreme Court reversed the Ninth Circuit's decision that it does, dispelling the notion that "Rule 54(d) creates a presumption of statutory construction in favor of the broadest possible reading of the costs enumerated in §1920." Instead, the court explained that "because taxable costs are limited by statute and are modest in scope, we see no compelling reason to stretch the ordinary meaning of the cost items Congress authorized in §1920." The court's narrow reading of allowable costs under §1920 is quite in line with the Third Circuit's Race Tires interpretation of the statute, and calls into question more expansive views such as that in Online DVD Rental. Interestingly, the latter decision is on appeal, and it is anticipated that the Ninth Circuit will be issuing its decision in early 2013. It will be interesting to see if, in light of Taniguchi, the Ninth Circuit feels compelled to apply a more narrow interpretation of §1920.
Notwithstanding the split in the circuits, there is enough guidance in the case law to discern a number of steps that litigants can take to improve the likelihood of an award of e-discovery-related costs under §1920(4). First, when negotiating the terms of a discovery agreement, parties should attempt to specify that e-discovery costs are recoverable by the prevailing party as taxable costs, and be as specific as possible regarding e-discovery-related tasks that can be taxed. (See Tampa Bay Water v. HDR Engineering, 2012 U.S. Dist. LEXIS 157631 (M.D Fla., Nov. 2, 2012).) Even in jurisdictions where the restrictive view is adopted, the courts will allow more leeway where the parties mutually assent to shifting of specific costs. Second, as with any cost application, parties should be prepared to support §1920 applications with thorough and detailed documentation, including itemized estimates and bills from e-discovery vendors that contain enough detail to allow the reviewing court to identify each discovery task and related cost.
The Boeynaems decision demonstrates that courts may be receptive to some fee-shifting applications where a producing party cooperates and honors its discovery obligations in good faith. Similarly, Race Tires and recent decisions following it regarding the scope of cost recovery under 28 U.S.C. §1920(4) reveal that, depending on the jurisdiction, a party may recover some, but not necessarily all, of its e-discovery costs after prevailing in a case. Notwithstanding these developments, the Race Tires and the Supreme Court's Taniguchi decisions signal adherence to the long-standing rule that a producing party will generally bear most if not all of the cost of retrieving, processing and producing ESI.
Scott J. Etish is an associate in Gibbons' business and commercial litigation department. His practice is focused on complex business and commercial litigation in state and federal courts.
Stephen J. Finley is an associate in the firm's products liability department. He practices in the areas of products liability litigation and business and commercial litigation in the state and federal courts of Pennsylvania and New Jersey.